Since the origin of home television in the 1940's, a primary source of revenue for television networks has been through paid advertisements that are interspersed between television programming of entertainment or news information as “commercials” for products and services. Typically 15 to 60 seconds in length, television commercials are grouped together as pre-defined breaks in the broadcast of a television show, occurring after every few minutes of television programming. It is known that in every one hour of television programming, there are approximately sixteen (16) minutes of commercials. The number of commercials and the timing between placement of the commercials are often dependent upon the type of television show (i.e., sporting event, game show, movie, or sitcom) or the format of the program (i.e., live or pre-recorded).
Television advertising is generally more effective when aired during popular television programs that are watched by many viewers who are interested in buying the types of products or services that are advertised. In determining whether a television program may be appropriate for particular advertisements, advertisers typically consider whether the program attracts large numbers of viewers who are in the same age group, gender, and income level, and have similar interests with those who tend to purchase the products to be advertised. Selecting the placement of advertising in this manner increases the likelihood that viewers who watch the advertisement will be interested in or may otherwise influence household purchasing decisions concerning products advertised during the program.
Although the process of selecting advertisements for television programs according to viewer demographics can be effective, broadcast television commercial advertising remains inherently inefficient because the same advertisement is shown to the entire audience of a television program. For example, while some viewers of a television game show program may be interested in a television commercial for a convertible automobile, others may be more interested in an advertisement for a minivan or sport utility vehicle. Because a single commercial advertisement cannot be tailored to the unique interests of each individual viewer, the advertisements are usually of little interest to a significant portion of the viewers. As a consequence, commercial advertisements are often disregarded by a large percentage of viewers.
Television networks typically reserve a portion of advertising time slots for local television stations to run advertisements for local businesses or public service announcements that affect the local television audience. In the present broadcast system, the same local advertisement is played to all recipients of the television broadcast signal, regardless of the viewers' particular locations within the broadcast area. In many circumstances, this method of local advertising is inefficient because a local advertisement only applies to viewers in one portion of the broadcast area. For example, although a television station may broadcast commercials to all viewers within a fifteen-mile radial distance of the broadcast tower, a commercial for an automobile dealership that is fifteen miles north of the television station may be irrelevant to a viewer who is located fifteen miles south of the television station. It is highly unlikely that the viewer will buy an automobile from the advertised dealership if there are many other dealerships that are more conveniently located. Accordingly, the inability to target advertisements to viewers according to location within a local broadcast area reduces the effectiveness and thereby increases the cost of local television advertising.